Sales tax takes a three-day holiday
Consumers start their shopping carts today
By MIKE VOSS
This weekend’s sales-tax holiday is good news for consumers, especially those buying back-to-school items, but not-so-good news for the state government.
Consumers have the opportunity to save more money this sales-tax holiday than they did during previous sales-tax holiday, according to the N.C. Department of Revenue. Last year, Gov. Mike Easley signed a law that added school instructional materials, such as reference books, maps, globes, textbooks and workbooks with an individual price tag of up to $300, to the list of items included as exempt from the sales tax. Previously, the price limit was $100.
The sales-tax holiday, which applies to state and local sales taxes, begins Friday and ends Sunday. The back-to-school sales-tax holiday was enacted by the General Assembly and signed into law by Easley in 2001.
While consumers get a three-day break from the 6.75 percent tax charged in most counties, the state is expected to lose an estimated $9.2 million in revenue it would otherwise collect on sales. The sales-tax holiday will be the seventh to occur in the state.
With many retailers suffering from a slumping economy, they are anxious to see if the suspension of the sales tax will spur consumers to shop.
Beginning Friday, clothing, footwear and school supplies of $100 or less per item; sports and recreation equipment of $50 or less per item’ computers of $3,500 or less per item; and computer supplies of $250 or less per item will be exempt from state sales tax during the weekend. State sales and use taxes will go back into effect at midnight Sunday.
Retailers may only collect from their customers sales taxes that are legally due (during the weekend), according to the N.C. Department of Revenue’s Web site.
Clothing accessories, jewelry, cosmetics, protective equipment, wallets, furniture, items used in a trade or business, and rentals are not covered by the exemption and will be subject to the applicable tax.
In November, consumers will receive another reprieve from the sales tax with the governor’s first tax holiday on energy-efficient items. During the first weekend of November, specific Energy Star-qualified appliances such as washing machines, freezers, refrigerators, air conditioners and other items will be exempt from sales tax.
A complete list of eligible items is available at the N.C. Department of Revenue’s Web site: http://www.dornc.com/taxes/sales/holiday_4-08.pdf.